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Following the introduction of the Stored Value Facilities Regulations in 2020, as a next step to the development of financial technology practices and enhancing the payments industry in the United Arab Emirates (UAE), the Central Bank has on 6 June 2021 issued the Retail Payment Services and Card Schemes Regulations (“Regulations”).
The Retail Payment Services are digital payment services and have been categorised into nine sub categories under the regulations, namely:
Card Schemes are also regulated under the regulations. Card Schemes have been defined as the set of rules, practices and standards that enable a holder of a payment instrument to affect the execution of card-based payment transactions within the UAE, which is separated from any infrastructure of payment system that supports its operation, and includes the card scheme governing body.
In summary, these regulations set out the:
We have highlighted below some of the noteworthy elements of the Regulations.
Retail Payment Services
Payment Token Services
Obligations towards Retail Payment Service Users Card Schemes
Access to Wages Protection System
The Central Bank may order the cessation of provision of the Retail Payment Services or the operations of the Card Scheme if the PSP or the Card Scheme concerned has not obtained the relevant license from the Central Bank before the end of the transition period i.e. one year from the date of this regulation. We understand that the transition period applies to existing schemes, which need to adjust their licencing position and not to new schemes which are intended for launch post the issuance of the Regulations.
This regulation shall not apply to the following:
With these Regulations, the Central Bank aims at providing safety, soundness and efficiency of Retail Payment Services, adoption of effective and risk-based licensing requirements for Payment Service Providers, promoting the reliability and efficiency of Card Schemes as well as public confidence in card-based payment transactions and promoting innovation and creating a level playing field for market participants.
For further information, please contact Sarah El Serafy.